1) Aspen company produces widgets. August budgeted production costs are below: W

Question

1)            Aspen company produces widgets. August budgeted production costs are below:
            Widgets to be produced                 100,000
            Direct material (variable)                $30,000
            Direct labor (variable)                     50,000
            Supplies (variable)                          25,000
            Supervision (fixed)                          40,000
            Depreciation (fixed)                        30,000
            Other (fixed)                                     10,000
            Total                                             $185,000

In September, Aspen expects to produce 120,000 widgets. Assuming no structural changes,

what is Aspen ’s budgeted production cost per widget for September?

            A) $1.72
            B) $1.85
            C) $1.54
            D) $1.95

            
2) Use cost information in 2) above. In August, the actual direct labor costs were      $46,000 and Aspen produced and sold 90,000 widgets. The direct labor    performance variance (difference) is?

            A) $5,000 unfavorable
            B) $5,000 favorable
            C) $1,000 unfavorable
            D) $1,000 favorable

Below is a performance report that compares budgeted and actual profit of Boyles Beer for the month of April:                                                                          

                  Budget          Actual            Difference                

Cost of ingredients: 162,000      166,000    4,000

Controllableprofit:   $47,000      $44,800     ($2,200)                                                            

C)       $10,980

5)The New Product, Inc is looking to achieve a net income of 15 percent of sales. Here is the firms's profile: Unit sales price is $10; Variable cost per unit is $ 6;    Total fixed costs are $ 50,000. What is the level of sales (in units) required to           achieve a net income of 15 percent of sales?

A)        12,000 units

B)        21,000 units

C)        16,000 units

D)        20,000 units

6) One Small Grill Company is a start up firm with the following profile: Unit selling price = $ 230; Variable cost per unit = $ 130; Fixed costs = $ 36,000; and Tax         rate = 40%. What number of units should the firm sell to achieve an after tax target income of $ 6,000?

A)        200

B)        460

C)        230

D)        300

7)JingleGym, a best-selling toy, has a selling price of $15. If the contribution margin ratio is 40% and if the fixed costs are $60,000, how many JingleGyms must the company sell for a profit of $450,000?

A)    100,000

B)      30,000

C)      34,000

D)     85,000

E)     None of the above

8)   After a good 2011, JingleGym decides it needs to increase its sales by 10% in 2012. Which of the following is the most likely to stay the same in 2012:

    A)        Total Sales Revenue

B)        Total Variable Costs

    C)        Total Fixed Costs

     D)        Total Contribution Margin

    E)        Both C as well as D                    

9)  JingleGymApp, a new division of JingleGym will be responsible for creating and selling an app version of the very successful JingleGym. The company expects that the new division will be housed in a separate floor and will pay a rent of $20,000 to JinglyGym. Salaries for the developers and a manager will total $400,000. New computers will cost $300,000 and will be depreciated annually at the rate of 10% of cost. Advertising expenses are expected to be $50,000. The cost of producing an app is negligible at 4% of the selling price but Apple's appstore charges a 30% commission for each app sold. With this data, JingleGym wants you to estimate the contribution margin (CM) and the break-even point (BEP) in dollars for the new division:

A) There is insufficient data to calculate either value

B)        CM=66%; BEP= $757,576

C)        CM=34%; BEP= $1,166,667

D)        CM=66%; BEP = $1,166,667

E)        CM=34%; BEP = $757,576

    

                     Quantity              Demanded Demanded Price (No Bose) (With Bose) $29,000 14,000 16,800 $30,000 11,200 13,440 $31,000 8,960 10,752 $32,000 7,168 8,602 $33,000 5,734 6,881 $34,000 4,588 5,505 $35,000 3,670 4,404 $36,000 2,936 3,523 $37,000 2,349 2,819 $38,000 1,879 2,255 $39,000 1,503 1,804 $40,000 1,203 1,443

Explanation / Answer

1) total cost / units = C) $1.54 2) divide the cost / units = to achieve per unit cost and then multiply it with units that are produced : A) $5,000 unfavorable 3) D) & B as both give the same answer . variable cost * 115 % 4) C) $10,980 . Labor + Material amounts 5) D) 20,000 units . 6) B) 460 . mulitply amounts to get the target profit 7) D) 85,000 . Target profit + fixed cost / selling price into contribution margin 8) E) Both C as well as D . Check them to calculate that both always remain the same. 9) A) There is insufficient data to calculate either value , as the selling price and variable cost are both in percents against each other. That is why that is not possible to calculate them out. 10) B 11) A) 2,250 units 12) D) $280,000 . the demand is unlimited so company should produce product y only as it has more contribution with lesser setups. 13 ) A) $223,100 . Calculate with each year to get the amount. 14) A) $50,000 15)D) $51.80 16)A) 60% 17) C) $35,000 price with Bose sound system. 18)A. 60% . same question as before .Simply divide the total cost per unit that is 5 / 8 to achieve the markup cost. 19) C) $39.00 . marup of 30 can be acheived by this cost . 9 / 30 . Total cost of producing a single unit is 30 . while 39 - 30 is the contribution . 20) 40,000 $9

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.